Financial Aid 101 Paying for

Postsecondary Education

Distance from home

Ideal fit?

Cost

Admission

criteria

Size Geographic

setting Atmosphere

Academics

Estimate Costs

Pay for all of it

How many

credits does it

take to

graduate?

Financial Aid

Offers Aren’t

Available

Indefinitely

https://completecollege.org/wp-content/uploads/2017/11/CCA-Intensity-Brief-April3-1.pdf

Graphic from Step Up Utah

PLAN AHEAD

Higher Education Choices

• Four-year college or university

• Two-year colleges

• Business trade and tech schools

• Hospital schools of nursing

Does the student want to enter the job

market quickly?

Is undergraduate work preparation for

further education?

Affordability

ROI

Resources

• EducationPlanner.org • MySmartBorrowing.org • CollegeResults.org

• Collegecost.ed.gov » Net-price calculators

» College Scorecards

SCHOLARSHIPS

Many qualifications to receive scholarships

High School

Seniors

apply for an

average of

0

scholarships

❖Don’t leave free money on the table ❖Employers, bank, credit union,

church

❖Larger scholarships due in the fall ❖Intel Science Talent Search, Burger

King Scholars Program, Live Mas Scholarship- Taco Bell, Cameron Impact Scholarship (juniors), AXA Achievement Scholarship, Coca Cola Scholars, ThanksUSA

❖Local, smaller scholarships in spring

❖Apply to many – set a goal of 25!

Increase your scholarship options

❖Academics ❖Athletics ❖Community and

Volunteerism ❖After school or summer jobs ❖Special interests (hobbies,

clubs, activities, church, etc.)

Scholarship Sites

• Fastweb.com

• ScholarshipAmerica.org

• Peerlift.org

• CollegeBoard.org

• PittsburghFoundation.org

• Tfec.org (HR)

• ThePAFoundation.org

(SS)

Unusual Scholarships

• StuckatProm.com

• Afsascholarship.com

• Google “left-handed

scholarships”

Unique Scholarships

Jif Most Creative Sandwich Contest

• Jif Peanut Butter holds the Jif Most Creative

Sandwich Contest as a fun way to award students preparing to attend

college. The award includes a scholarship worth $25,000, as well as a

Jif Peanut Butter Basket worth $50.

The Wear Duck Tape to Prom Scholarship

• Duck Brand products holds an annual contest to see who can make

the best prom outfit from Duck® Tape. The winners receive a $5,000

scholarship.

American Fire Sprinkler Association Scholarship Program

• The American Fire Sprinkler Association has scholarships totaling

$20,000 that are awarded to students who submit the required

documents, including an essay on automatic fire sprinklers.

Unique Scholarships

Chick and Sophie Major Memorial Duck Calling Contest

• Stuttgart, Arkansas awards scholarships at the Chick and

Sophie Major Memorial Duck Calling Contest. First place wins

a scholarship of $2,000, second place wins $1,000, third receives

$750, and 4th receives $500.

The Fountainhead Essay Contest

• Ayn Rand Novels, a site specializing in the writings of author and philosopher

Ayn Rand, has an annual essay contest awarding between $50 and $10,000

to over 200 students who write essays on chosen topics about Rand’s well-

known work, The Fountainhead. While not strictly a scholarship, these

contests are only open to 11th and 12th grade students.

$2,500 “Advice to Your High School Self” Scholarship

• Unigo (Campus Discovery) has a scholarship for $2,500 called the “Advice to

Your High School Self” Scholarship. Students approaching graduation from

college or recent college grads who finished an associate’s or bachelor’s

degree are eligible.

FAFSA

FAFSA.gov Apply after

October 1 (of

senior year in

HS)

It’s the student’s

application

(parent sections)

2020-21 FAFSA

will use 2018 tax

information

myStudentAid mobile app

FSAID.ed.gov • Sign the FAFSA electronically

• The student and one parent (if the

student is dependent) will need an

FSA ID Username and Password

• DO NOT lose it

• DO write it down – You will need to

file a FAFSA every year you are

enrolled

Whose information

is included on the FAFSA?

• Student

Applicant

• Parent

information

• (if the student is

dependent)

Whose information is

included on the FAFSA?

• If student is dependent,

parent information is

required

• Divorced or separated

parents – choose the

parent that provides

more than 50% of the

student’s support

Whose information is

included on the FAFSA?

• Adoptive parents - yes

• Grandparents – no

• Foster parents - no

• Legal guardians - no

• Anyone else the student

is living with - no

Independent Students are: • 24 or older on Jan 1st of

award year • Veteran (includes active

duty personnel) • Working on graduate

degree • Emancipated minor in legal

guardianship • Orphan, in foster care, or

ward of the court at anytime when student was age 13 or older

• Have legal dependents other than spouse

• Student deemed homeless by proper authority

What if I work

and have my own

place to live?

What if I cannot

provide my

parent(s’)

information on

the FAFSA?

Special Circumstances

• You’re filing the FAFSA based on

2-years-prior income

• If anything changes (i.e. parent

loses a job, divorce/separation,

death of parent, etc.)

Contact your school

Contact PHEAA

Know your deadlines!

Schools have priority filing deadlines.

ASK THEM!

State Grant deadline is:

May 1 - First Time and Renewal Applicants

that plan to enroll in a degree program or a

college transferable program at a junior college

or other college or university

August 1 - First Time applicants that plan to

enroll in a community college; a business,

trade, or technical school; a hospital school of

nursing; or a 2-year program that is not

transferable to another institution

Expected Family Contribution (EFC)

Expected Family Contribution (EFC) • Student and Parent Contribution

• Bulk of EFC comes from income

• Assets exclude: value of home you

live in, personal property,

retirement, and life insurance.

• Assets include (but not limited to):

value of cash, savings, and

checking, investment accounts, 529

plans, rental property, etc.

• Small asset protection allowance

for parents this year.

• Student income contribution = 50%

of amount over $6,840; assets at

20%.

• Parent contribution divided by

number of children in college at the

same time

Confirmation Page

At the bottom of the

confirmation page, you

will find the link to the

State Grant Form and

the EFC

First-time filers only –

can also access at

www.pheaa.org

PA State Grant Form (SGF)

Check Rights and Responsibilities Box to electronically

sign SGF

FINANCIAL AID

OFFERS

Financial Need

Cost of Attendance (COA)

- Expected Family Contribution (EFC)

= Financial Need

Sorting it all out

How much is

gift aid? – I

don’t have to

pay it back.

How much is

self-help aid? –

I will have to

pay it back or

earn it.

What are the

total costs and

how much will I

owe the

school?

Compare Offers

Where does the money come from?

Gift aid (do not repay)

• Pell Grant (max $6,195)

• SEOG

• TEACH Grant

• Iraq and Afghanistan Service Grant

• Americorps

• GI Bill

For more information: studentaid.ed.gov, americacorps.gov, pheaa.org, or gibill.va.gov

• PA State Grant (max $4318)

» (OH, DE, MA, VT, WV, and DC)

• EAP/FMEP

• Chafee Grant

• Blind or Deaf Beneficiary Grant

• Postsecondary Educational Gratuity Program

• PATH

• PA TIP

• RTSS

Self-help aid (must work to earn or repay)

• Work Study » Say “yes” to work study question on the FAFSA

• Loans » Federal Direct Stafford Loans

» PLUS Loans

» Private/Alternative Education Loans

$37,000

Average student indebtedness for graduates of the class of 2016.

Repayment Examples

It is estimated

that you would

need an annual

salary of $46,573

to be able to

afford this loan

payment.

Source: finaid.org

Repayment Examples

Source: finaid.org

It is estimated

that you would

need an annual

salary of $23,286

to be able to

afford this loan

payment.

Opportunity Cost

Opportunity Cost

Source: bankrate.com

What if the

student invested

the extra $200

per month for 10

years instead

into a Roth IRA?

Opportunity Cost

Source: bankrate.com

What if they

never invested

another penny

but saved it until

retirement 40

years late (age

72).

Studentloans.gov

Log in with your

FSA ID and

complete your

Master Promissory

Note (MPN) and

Entrance

Counseling.

Direct Stafford Loans

» Subsidized – no interest while in school

◦ Interest will be charged after an interest-free,

6-month-grace period

◦ 4.53% fixed rate for loans between 7/1/19 and 6/30/20

◦ *1.059% origination fee deducted at disbursement

» Unsubsidized – interest accrues in school and grace

◦ 4.53% fixed rate for loans between 7/1/19 and 6/30/20

◦ *1.059% origination fee deducted at disbursement

» *Gross loan amount of $5500 will be $5441.76

» Interest rate adjusted annually and capped at 8.25%

Calculating Accrued Interest

To calculate your daily interest accrual, use the following formula:

• Interest rate x current principal balance ÷ number of days in the year

= daily interest

Example:

Sara Student has a $2,000 current principal balance and 4.53% interest

rate this year. Using the formula:

• .0453 x $2,000 ÷ 365 = $0.25 (~$23 quarterly interest)

What if she borrowed $10,000?

• .0453 x $10,000 ÷ 365 = $1.24 daily (~$112 quarterly

interest)

Loan Servicer

myfedloan.org navient.com

mygreatlakes.org nelnet.com

Undergraduate Loan Limits

Dependent UG Annual Loan Limits (not including students whose parents are unable to borrow under the PLUS Program)

First Year $5,500 of which no more than $3500 may

be subsidized

Second Year $6,500 of which no more than $4,500 may

be subsidized

Third Year and

Beyond

$7,500 of which no more than $5,500 may

be subsidized

Undergraduate Loan Limits – cont’d.

Independent UG Annual Loan Limits and Dependent Students whose Parents cannot borrower PLUS

First Year $9,500 of which no more than $3,500 may be

subsidized

Second Year $10,500 of which no more than $4,500 may

be subsidized

Third Year and

beyond

$12,500 of which no more than $5,500 may

be subsidized

Graduate or Professional Students All Unsub: $20,500

Direct PLUS Loans

• Parent is the borrower

• Credit check is required

• Cost minus financial aid received (max)

• Repayment begins 60 days after disbursement

» Parent can choose to defer payments while student is

enrolled

• Interest/Fees: 7.6% rate and 4.264% fee (19/20)

• Apply at www.studentloans.gov

Private Loans

• Nonfederal loans, made by a lender such as a bank or

other business.

• Student borrows in his or her own name usually with a

cosigner.

• Fees, interest rates, loan amounts, and repayment

provisions vary by lender and are generally higher than

federal student loans.

• Compare loans before making choice and read the fine

print!

Loan Tips

• Never borrow more than what you need

• Look at loan repayment calculators on

studentloans.gov or finaid.org to determine what

payments will look like

• If you’re a parent, ensure you can sustain the

loan borrowing (i.e. years, other students, own

retirement goals, etc.)

DECIDE

Review and consider all options.

Sometimes the best fit is not the first

school choice.

Determining Affordability

• Approach this process as you are buying an

EDUCATION.

• Apply everywhere you want, but be open

minded and give yourself options.

• Think in terms of yesterday’s money, today’s

money, and tomorrow’s money.

• Have discussions as a family.

How do students meet the gap between

financial aid and college costs?

• Parent loans? (*home-

equity line of credit) • Double check with the

school (additional institutional money, scholarship opportunities, institutional loans).

• Out-of-pocket?

• Expendable

income/sign up for a

payment plan?

• Scholarships?

Ways to Pay

Ways to Save Dual

Enrollment

Beware of the 5 or 6 year plan!

• 5th year may cost 20-25% more than your

first year

• Loss of institutional funds after 4 years

• Loss of State Grant eligibility after 4 years

• Run out of federal loan eligibility (capped at

$31,000 for undergraduate students)

What should you do now?

Timeline • Admission applications start in

September of senior year in hs • FAFSA - October 1 of senior year

in hs • Decide by May 1 of senior year

in hs • Pay deposit

• Billing in July for fall; Payment usually due in August How are you going to pay the balance?

Payment plans; PLUS or alternative loans; 529 Plan or other savings?

• Has anything changed since you filed the FAFSA? (divorce, job loss, death of parent)

Resources • FAFSA.gov

» Questions about FAFSA or FSA ID

◦ 800.433.3243

• PHEAA.org » Questions about the State Grant

Form

◦ 800.692.7392

• Studentloans.gov –

information on federal loans

• Nslds.ed.gov – information on

your specific federal loans

Contact Information

Dr. Kimberly McCurdy kmccurdy@pheaa.org